March 15, 2012

Click here. Jefferies is to purchase MF Global’s paper metal assets, not the actual metal. Not sure that MF Global even had physical metal that was their own.

Anyway, don’t get too excited that this sale will get any more money back to investors. Remember Jefferies? They insured some of those bad bets of MF Global. They were set to go down too. This is probably just enough to cover enough of the the insurance they issued to keep them in business. This is probably just a movement from the liability to the asset side of the Jefferies balance sheet to net out to zero and nothing more.

Poor GS, this Muppet thing is going to take a long time to go away. It may become the symbol for the huge ethics problem in the global financial system. From taxpayers bailing out bonuses to robo-signing to GS trading against their clients (which it industry wide) to MF Global outright theft.

Not to appear too cynical, but this sounds like the local sheriff shaking the doughnuts off his shirt and arresting a graffiti artist when people start complaining about the wide open graft and corruption plaguing the county in drugs, gambling and prostitution.

Groovygirl’s second favorite word: muppet army. From zerohedge: “we are about to get a deluge of Greg Smiths exposing the muppet army, only this time they will not cast merely ethical aspersions about their employers, but will provide solid, hard evidence of criminality.”

As the saga continues, gg finds this whole thing very interesting. Especially, the banks’ reaction. It’s kind of like they don’t know that the entire world hates them. Does Diamond Jamie Brady and Lord Blankity-blank really think that the global population believes the spin put out by main stream media. Do they really believe anyone under 40 even watches main stream media?

GG would handle this pubic image problem much differently. (Of course, if you treat clients well, you wouldn’t have a need to clean up your image.) Take CME for instance. There are feel good commercials on EVERY day after the MF Global blow up. They have CEOs and CFOs on the major financial channels trying to build trust. Not that gg thinks they are really doing anything, but at least they are trying to give the illusion that they care about investors and their money. Apparently, we are even past illusion with the big banks.

The only thing GS and JPM are doing is trying to keep the rest of their employees from speaking ill to the press.

And what about this piece from Bloomberg…making the assumption that GS making money over their clients is good, that greed is ethical banking behavior and everyone knows this. What? Click here. Do these people talk to anyone outside their bubble? The Fall of the French Monarchy and the French Revolution comes to mind here. King Louis and Marie clued in about the time they approached the guillotine.

That’s the problem with ruling from bubbleland, you will never see the revolution coming.

Click here for Martin Armstrong’s latest release entitled Pi dated March 14, 2012 (7 pages). Yesterday was the official Pi day, as it is Einstein’s Birthday. Since Pi is tied to Martin’s Economic Cycle,he discusses cycles. He also comments on Mr. Smith’s comments about GS.

Mr. Hunter does another excellent job of linking what main stream media reports separately, but is, in fact, very related. If you are an investor in anything, you should understand what is going on here.

In plain English, the Chicago Mercantile Exchange (CME) no longer wants to be the clearing house for European derivatives. The derivatives market in Europe must have been very lucrative for the company. After all, just the credit default swap (CDS) market is reportedly worth $50 trillion globally. (A CDS is a form of insurance. If there is a default, the debt is paid by the entity that sold the insurance contract.) I ask myself, why would the CME willingly stop being the clearing house for this profitable and large market?

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Is the CME exiting the European CDS market just when the proverbial CDS contracts are about to hit the fan? This comes just after the CME’s 50 year old CEO, Craig Donohue, announced his retirement earlier in the week. I am sure that is just a coincidence. I know the mainstream media has been telling folks everything is just fine with the Greek debt crisis, but that’s not what a Member of the European Parliament said in an interview yesterday. Nigel Farage said on King World News, “We sort of pretend that it didn’t happen and it wasn’t really a proper credit event, yet we know that various CDS’s are being triggered. We also know that yesterday 110 private bondholders, who had held their bonds through German banks, are now taking legal action. Just to top it all, the thing that almost made me laugh was that yesterday the German Finance Minister said, ‘We must be preparing now, any day, for a third bailout.’ So this idea that the leaders of Europe give that everything is fine, everything is not fine.” The outspoken Farage went on to say. “You can argue that the ECB, by printing money, has staved off the crisis for a few weeks. But the fundamentals haven’t changed one bit, the euro is in deep, deep crisis. . . . They are determined to prop up and keep together this completely failed experiment. But they know as soon as they give in on Greece, the circus will move on to Portugal, Spain and possibly Italy.”

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The story’s conclusion said, “We still don’t have a solution for Greece, so there will be a harder default to come,” predicted Charles Wyplosz, director of the Geneva-based International Center for Money and Banking Studies.”